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Dividing Military Reserve Early Retirement Pay
Brian Mork, Ph.D. [Rev 2.22]
marriage asset of military
retirement pay due to divorce, Active Duty and Reserve retirement are
similar, but not the same. This web page describes a military Reserve (or National Guard) specific issue:
Early Retirement pay - when the divorce occurred before or spanned
January 28, 2008 and military duty extended beyond that date. If
your concerns are more general in nature, see other
web pages describing Dual Coverture
methods, Promotion Enhancement,
or Area Method
calculations (with example divisions).
In almost all jurisdictions, dividing Reserve early retirement is
an issue of first impression worth discussion. Do not confuse this with civilian
buy-outs to retire early, nor prior military "early retirement" buy-outs like SSBs or VSIs.
Those are old legal issues. This is about a new Federal law 10
USC 12371(f)(2)(A) enacted in January 2008 that applies only to
military Reservists and does not negatively impact or comingle in any
way with the traditional Reserve retirement described in 12371(f)(1).
If you are an attorney, this web page, it's sister pages
above, and the reference links at the bottom of all pages, are a gold
mine. These pages explain what you need to
know, with proper legal and citation "hooks" to customize the
information for your case. You will find that if a court is
familar with military retirements, it is probably
limited to Active Duty Retirement. Beyond that, a court must
Reserve Retirements. Beyond that, a court must understand Reserve
Early Retirement. These are significant steps.
Background about Early Retirement
Discussions about military retirement typically center around the the amount
of military payments to be
received each month by the non-military ex-spouse. If there is
possibility for future military promotions after the divorce, you
should read about how to properly do calculations to handle promotion enhancements after divorce.
In contrast to those issues, the salient point on this web page is that
a military retirement asset value is the multiplication of the amount each month multiplied by which months
payment is received. Up until 2008, this distinction has not
As of January 2008, a new Federal Law offers a retention bonus to military Reservists in the form of an additional and distinct
retirement. For a
Reserve military retirement, there are now two quantifiable
different military retirements to be individually assessed to
be a marital asset or not. The two retirements do not comingle in
any way, and the new retirement does not modify or affect the
retirement in any way.
Retirement pay paid after a
Reserve military member turns 60 is the traditional retirement that
courts may be familiar with. For a Reservist,
the new 2008 law authorizes retirement payments before age 60.
Specifically, for every 90 days of additional days of duty done after
28 January 2008, three additional monthly retirement checks are
earned. In the simplest case, if a marriage ended before 28
2008, the before-age-60 payments are not a marital assets at all and
are not subject to division.
The magnitude of this asset is equal in value to a house or real-estate
property. For an O-6 retiring with 6300 duty points
and 27 months of early credit, the early retirement asset is worth 27
monthly payments of 2.5% * (6300/360) * $10,878 => $4759, or
$128,500 in 2016 dollars. The question at hand is if this asset is
earned from active work only after the divorce, should a spouse receive
up to half of the value (the max percentage set by USFSPA Federal
law) when it is actively earned after the divorce? A Depart of Defense Congressional report suggest an answer in a way consistent with every state law:
ex-spouse a portion of
post-marriage benefit] of military retired pay is
inconsistent with the treatment of other marital assets in divorce
proceedings—only those assets that exist at the time of divorce or
separation are subject to division. Assets that are [actively] earned
divorce are the sole property of the party who earned them."
The default position of DFAS is to divide any and all retirement
checks. A division order must specifically address a Reserve
early retirement and tell them to not divide the early checks or divide
them differently. Without guidance, DFAS assumes early payments
are to be divided the same as payments after age 60.
Typical of confusion in this area, DFAS responds to the "pay at the same time" clause in
division order, interpreting it as a mandate to divide early
retirement. The problem is that this clause came from a 2004 Mark
Sullivan template which Mr. Sullivan himself describes in the template is for a different
purpose (direct DFAS to pay according to the 10-year rule). DFAS'
interpretation is incorrect because it conflicts with the stated intent
of the author and ignores the fact that the clause existed in the
template nearly 4 years before the early retirement law existed.
My points is this: any lack of clarity on the part of division order
will create inequity against Reserve retirees who did duty both before
and after the date
of the new law.
A 2009 State of Michigan Appellate court also ruled that retention bonuses earned after the divorce belong only to earner of the bonuses. The court
(12/29/2009 Skelly v. Skelly, No 287127) overturned a lower court
ruling and clarified that retention bonuses earned or accrued after the
marriage are not divisible property. Reserve retirement payments
before age 60 are precisely a retention bonus earned only after
The new Federal law has big implications on how the military retirement
division order should be written if any portion of
military duty spans across 28 January 2008. In almost all jurisdictions, early retirement will be an issue of first
impression. The rest of this document presents arguments for or
arguments againt dividing the early retirement asset. If you want
to know how to actually do it, please refer to the separate web pages
for Dual Coverture, Area Method, or Hypothetical Method.
Regardless of when a military Reserve member enters retired status, 10
USC 12371(f)(1) authorizes retirement payments
only at and after military member age
60. However, as of January 2008, 10
USC 12731(f)(2)(A) authorizes a Reservist to receive additional payments before age 60
duty days after January 28th, 2008. An Air Force
explains this new
law which creates a new, separate, and
distinct, marital asset. The new asset is additive to the estate
of the marriage, and does not comingled or impact in any way the normal
retirement assets which are permitted for division since USFSPA became
With the prior traditional Retirement military retirement, there is
of effect of marriage duty years such that years are treated equally
division based on a count of how many military years were also married
years—this is the “coverture fraction” allowed by the USFSPA.
Comingled means that a date of duty (before or after divorce) could be
swapped with any other period of the marriage and military career and
retirement value does not change. This is not true
when moving a duty date across the 28 January 2008 boundary, and therefore
demonstrates that the two retirements are not combinable or
It’s important to note 10
clearly and quantifiably
defines the receipt of retirement pay before age 60 dependent if and
only if military duty was done January 28th, 2008 and after. Because of
date in the sand, there is no
commingling, and USFSPA does not authorize "reaching across" this date and combining retirements. Division of the
benefit requires handling as
a separate asset. Points earned before January 28, 2008 create
coverture fractions for payments after age 60. Points earned after
Janaury 28, 2008 create coverture fractions for before age 60
payments. If a marriage ends before January 28th,
no division should occur for payments before age 60.
In summary, Reserve retirement consists of two separate and distinct, and not
comingled retirements, which may require two coverture fractions if one of them is not zero.
- Retirement earned after 1/28/08 --> retirement payments before
- Retirement earned before 1/28/08 ---> retirement payments after
Argument For and Against
The rest of this document discusses why early retirement earned after a marriage should not be divided. If you want to know how to actually do it, please refer to another web page on Dual Coverture or Area Method.
One could argue in a Talmudic way that the military member is re-using
shared marital points to calculatethe
before-age-60 benefit, or that additional benefit is
"based on" the
marital portion of the benefit, and therefore the ex-spouse should “get
of the benefit. This argument lacks viability in the face
a division order that awards division of military retirement benefit
"accrued during the marriage" or "earned during the marriage".
More pointedly, IF
you want to (incorrectly) accept the argument of "based on", then 50:50
division of duty during marriage is unfairly "based on" solo military
time before the marriage. (See where the white portion overlaps the dotted portion in the Area Method diagrams introduced elsewhere.) If the second argument is taboo, then the first argument should be declined, also.
The legally undefined and vague concept of "based on" logic is often
introduced after the divorce decree to invade the additional retirement
value while creating a division order. However, in addition to
the reflexive argument above, this
logic is faulty because it would lead
to absurd and
inequitable ramifications if applied to each spouse equally (see
numbered points below). State laws and divorce decrees explicity
say ex-spouse payments are to be calculated from benefit accrued during the marriage, not vaguely "based on"
events during the marriage.
A correct litmus test regarding
the division of retirement asset should ensure ex-spouse value does not go up or down based on anything either party does after the divorce, and this includes earlier payments. Remember this is asset division, not income
division. A marital (shared) asset divided at divorce should not
go up in value because one party does more work after divorce. The shared
marital asset does increase in dollar amount while parties wait for
payment because of passive time-value-of-money. However, actively
earned increase in value after divorce belongs only to the person who
earned it. If this is not true with your proposal, you are intentionally being inequitable.
Parlaying duty credit, that at the time of divorce is shared, into higher value via additional duty is a legitimate military member solo effort,
and does not invoke
divisibility of the
higher value enhancement. Duty credit or duty points are worth nothing; it is the use of the points that creates value and Early Retirement creates such a new use.
Here are multiple reasons why the separate and non-comingled asset
value in the form of early retirement payments must not automatically be lumped in with the traditional retirement:
- Allowing benefits earned and accrued after the marriage to be classified as a marital asset
because they are "based on" or "calculated from" marital
property is untenable
because the idea would a) need to be applied with symmetry to both spouses,
allow lives to separate, dishonoring the very definition of
- Analogy 1: Imagine a pilot military member, after the divorce, gets
job for a commercial airline. This job is quantitatively and
qualitatively based on and because of pilot experience in
the military during the marriage. Nonetheless, because the
benefit was earned and accrued after the marriage, no commercial
airline benefit is divisible as a marriage asset. Although earnings go up for the military member, no division occurs.
- Analogy 2: Imagine that during the marriage, firewood was
available on property the couple owned. After divorce and assets are
divided, the person with the property builds a house including a wood
stove to save fuel oil costs. Because the use and utility of the wood is created after the marriage, totally dependent on after-marriage investment, it
would not be appropriate to make that person send half the heating
savings to the other.
- Analogy 3: Imagine the ex-spouse who, after the marriage, writes a best-seller book
titled "My Life as a Military Spouse," based on marriage to the
military member. Even though this book is based on and can only exist
because of the marital years, because it was done after the marriage,
book profits are not divisible.
value of retirement points (payments before
age 60) earned by the military member after the marriage in no way
decreases the prior value to the ex-spouse and therefore
should not be encumbered. 5
8332(c)(4) is an example of how ex-spouse interests are already
Federal Law: if the post age 60 retirement value were decreased (it is not), then the ex-spouse
may invade the additional or dual-use value. However, Federal law limits how much the additional value can be invaded to the extent required to
make their original value whole.
In the case of before-age-60 benefit, the value retained
by the ex-spouse is NOT decreased, so invasion of the new benefit is
limited to zero. Even if invasion of pre-age 60 payments were
appropriate, Federal law
requires that it should be
restored to only the original value, which means potentionally
additional value is NOT
to be divided. This statute
demonstrates the Federal intent that
point value actively earned after the marriage belongs
entirely to the military member doing the work except in the case where
ex-spouse payments, and then it is to be shared only to the extent that
restores original value. Reserve Early retirement never affects
the original, and is therefore not to be invaded or encumbered.
The ex-spouse contributes no partnership to the early payments,
and therefore should expect nothing from
the early payments. Because
the ex-spouse contributes nothing after the marriage, that is how they
should expect their payment to change: the ex-spouse value should be
blind to any increases the ex-spouse is not part of.
is one exception, where both parties are trapped by Federal law.
Although the retirement asset would be ideally
divided at the time of divorce (like a 401(k) or IRA), the Federal
government forces both parties to wait for disbursement until after the
military member retires. Because both parties have to wait for
distribution of the asset until some future time after the divorce,
they are both compensated for the "time-value of money" or "cost of
living adjustments" via passive annual increases of the military pay
chart, to which retirement payments are indexed. Note that passive
increases may be divisible, but earned active increases such as early retirement payments are not. The Area Method
of division is the simplest and most lucid way to do this.
Once the early retirement benefit is earned or authorized, and adjudicated to not be a marital asset, exactly
how it is calculated is a private benefit or entitlement matter between
the military member and employer. The method of calculation never authorizes invasion of an asset, only how the asset is earned matters. Additional value or
dual-use value of each duty day is added solely by the work of
one person after the marriage. Therefore, the added benefit
with the added value belongs to only that person contributing to that
value. By way of anology, some military members receive a
retention bonus after the marriage by signing a contract after the marriage to stay
in the military for an additional number of years. In these cases, the ex-spouse would
gain no portion of that bonus, even though the military member was
positioned for eligibility because of longevity including military
years done during
the marriage. The
new retirement is a
financial retention motivation tool, obtained via a performance
contract after the
marriage that does not include the ex-spouse.
The enhanced value of the aggregate retirement
asset is created by earning more pay dates, not changing how much is
paid on each pay date. Prior USFSPA law and case precedence
is about determining how much is paid to whom on each date.
Federal statute, the enhanced
value given by the new law is quantifiable separate and distinct
benefit. The ex-spouse contributed
nothing toward the extra days, which create additional
pay dates, not
additional pay amount.
Retirement payments before
military member age 60 are not marital
assets, so dividing them under UFSPA is inappropriate. In the case of a marriage that ended before January 28,
2008, a court order should simply state that payments before
military member age 60 are not to be divided. When
marriage and military duty span January 28, 2008, the court order
should state two percentages or fractions. One is
applicable for payments before age 60 and one is applicable for
payments after age 60. Alternately, because of DFAS bureacratic limitations,
division orders could choose to not address the issue with DFAS, but rather direct "overpayments" to one person or the other
be returned to the rightful owner. In a similar way, the court
order may simply state payments before age 60 be returned to the
a chronologically opposite case where the military person worked solo military for years
before marriage. Courts do not recognize that ex-spouse
portion is "based on" or
"because of" prior solo military duty and therefore they should get
than half of the marital years. If
solo military duty before marriage does not
reach into the future to reduce the division of marriage years because of a "based on" relationship, then marriage
years should not
reach into the future and increase the division of post-marriage years because of a "based on" relationship.
The problem is
that using vague "based on" arguments is kind of like
saying a person's 50th year of life is based on the fact that they
completed the 40th year of life. This logic is not allowed in the
court because then the entire rest of a person's life would be
marriage asset. There is no place for intentionally vague
and legally undefined "based on" or "because of" language in court
The number of days retirement is received early (before member age 60) is proportional
to the amount duty days after the law. For example, twice as many
days after the law earns twice as many days of retirements before age
60. The early retirement value is
proportional to the number of duty days of shared effort before 1/28/2008, mathematically showing that they are decoupled and separate.
Just becasue assets have the same name is not a reason to divide both! The extra retirement pay dates requires no
prior rank, no prior seniority, no prior duty. It is a totally
separate program. It is quantifiable separable and
independent, authorized by separate dates of duty, authorized by a new paragraph in the Federal statute. Simply because
the separate benefit is also colloquially called “military retirement”,
courts may confuse the issue. However, if courts do not take
the time to understand and separately allocate this
retirement benefit, their error is as egreggious as if they lumped all
“IRAs” or all
“401(k)s” or all “pensions” together just
because they have the same
It is unconsciousable and exhibits judicial malpractice to say that a
401(k) or IRA started after the marriage should be divided simply
because it's called the same name!
Summary of Differences
Reserve Early Retirement pay is different than other military retired
pay discussed in the context of USFSPA. The table below
Normal Military Retirement (USFSPA)
Military Early Retirement
before age 60
|Retirement pay received after marriage may be divided because part it may be earned/accrued during marriage.||Retirement pay received after marriage should not be divided when it is also earned/accrued after marriage.|
|Traditional Reserve retirement pay
occurs when two conditions are met: age 60, 10 USC 12731(f)(1); and “20
good years” defined by 12732(a)(2), 12731(a)(2).
Active duty retirement is after 20 years, USC 8911.
military command issues pay orders under 10 USC 12732, which does not wait for age 60 - this pay is in addition to, and does not affect or comingle with any other military retirement.
|Asset value is accrued (retirement is earned) proportional to active duty dates across entire career.
|Value is accrued (retirement is
earned) counting active duty dates only after January 28, 2008. Days
of payment correlate exactly 1-to-1 with days of duty after January 28,
2008. If marriage did not continue past this date, none of the value
was earned during the marriage.
an active duty retirement, 20 years (7300 days) of military duty are
approved en-masse for
retirement credit. For a Reserve retirement, 20 "good years" of
duty status are approved en-masse for retirement credit. In
either case, this generates a “20 year letter” from the military
||Each and every date (not just days) must be submitted through MyPers
and reviewed, authorized, and approved by the Early Retirements branch
of the military reserves command. Each 90-day block of dates of duty
earns 3 more months of retirement pay. Separate date authorization
means there is no comingling of during and after marriage.
|The last duty date of one’s
20 year career enables the entire retirement. The
last date is functionally identical to all other dates because it is
the total of 20 years that turns on any and all of the retirement.
Note the U.S. Supreme Court (Mansel v. Mansel) ordered that military
retirements were not divisible because they don’t exist until this last
day of duty is earned, and hence were not earned during the marriage.
However, it was impossible to distinguish which duty date created the
total of 20 years; they were all the same. This confused “comingling”
of dates is why legislatures created the USFSPA to change the law of
|The last duty date does not
comingle with dates before Jan 28, 2008. The value of retirement is
not turned on by a sum of duty dates, rather the last duty block of
dates adds just one more block of payment. It is impossible to
construe that dates after the marriage were earned during the
|Paycheck for each month is the
same dollar amount as Early Retirement. However, the retirement asset
value is proportional to months of payment after age 60.
|Paycheck for each month is the
same as 20-year Reserve retirement. However, the retirement asset value is
proportional to months of payment before age 60.
|Expectation value of asset
exists since the first day of military duty. Military duty and
marriages start with knowledge and expectation of a possible future
|No expectation value exists
before January 28, 2008. Benefit never existed before this
date. Marriages and military careers start before this date with
no future expectation.
Rebuttal Questions and Answers
Q1: Aren't before age 60 payments based on points earned while married?
A1: No. There is no co-mingling of duty dates for the distinctly
separate early retirement payments. The before age-60 payments are a
distinct and separate different retirement value enacted by Federal law
after USFSPA. Early retirement is
a distinctly different marital asset and must be divided some, all, or
none, depending on marital and military activities after January 2008.
Q2: Aren't the age 60 payments made higher based on commingled points?
A2: No. Payments are not "based on" points. Payments are calculated from joint points, solo points, Federal COLA numbers,
military pay tables, etc. Points do not have value to divide, and
are not owned by
anybody. Lawful division is based on when value of is
earned, not what point is calculated
with. The before age 60 payments are calculated using duty
details after January 2008. No matter how many total marriage points
are earned, the before age 60 payments are zero unless marriage duty is
done after January 2008. The ex-spouse is already compensated for full
during marriage because commingled points earn the spouse a higher
percentage of monthly payments from the traditional age 60
retirement. Additional value earned after divorce does not affect
the traditional retirement in any way.
Q3: But if the divided points were absent in the calculation, wouldn't the before age 60 payments be less?
A3: If commingled marriage points were absent, then ALL payments
and after age 60, and for both parties) would be less. Ex-spouse
payments are intended to divide asset value earned during marriage, and
payments are preserved and do
not go up or down in value based on whether or not there are before age
60 payments. Points are not owned. The opportunity to USE those points
is earned. Using points for age 60 benefit is one thing. Using points
for payment prior to age 60 is a separate and distinct thing that does
Q4: Aren't the payments paid before age 60 based on the same points
that were partially earned by the ex-spouse? In fact, the payments are
exactly the same dollar amount ~because~ they're based on the same
points. If those same *shared* points cause the dollars to be divided
after age 60, shouldn't they also cause the dollars to be divided
before age 60?
A4: If the asset being divided was points, then your logic works.
However, the asset is not points. The marital asset of concern is an
amount of dollars ~based on~ the points (here again the words "based
on" perverts clear understanding because the word is vague and has
undefined legal meaning). Making the distinction between points and dollars calculated from those points
is important. The military member should be free and clear to use what they
are left with after the divorce in order to improve life for themselves
after the divorce. What they are left with is points, stripped of nominally half their value. The marital asset (dollar value
of the points) was already divided with post-age-60 payments. The
points themselves, stripped of nominally half their value, should not
be encumbered if the military member avails themself of a post-divorce
new-law contract with the government that gives new value to the points
that does not comingle, nor increase, nor decrease the previously
Division orders do not assign single-use privileges to the artifacts of
calculating retirement value, nor do they incumber the mathematical
formula used to calculate a contracts or third party agreement created
after a divorce. By analogy, a store coupon has no inherent value; it
has value only when redeemed in a suitable environment such as buying
something at the store. Having the coupon is worth nothing; buying a
product at reduced price is value.
Similarly, only the work which allows use
of retirement points contributes value, and the work that earned the
right to receive payment is what must be used to proportion a
division. Specifically, if all points are used to calculate a
second benefit that was earned after divorce, congratulations to the
person who negotiated or earned the addition benefit; it is theirs
alone and the additional resultant asset is not a marital asset.
The conversion of (or literally, the accrual of) financial value from the points after age 60 was set in both law and
expectation during the marriage so becomes divisible. The law creating the accrual of
financial value before age 60 from the points did not EXIST before the
divorce and has ZERO expectation value. Additionally, the new law did
not create passive benefit like earnings on an investment account that
would be divisible. The new Federal law demands active performance
after January 28th, 2008. There
is no way to conjure a marital asset from what didn't exist during the
marriage, wasn't expected during the marriage, and has to be worked for
after the marriage.
This is similiar to the example given elsewhere about writing a book.
If one of the spouses after the divorce writes a book based on their
married military life together, the earnings from those books sales are
not a marital asset because their was no value until the after-divorce
In fact, the argument to not divide is true for any militiary
retirement where additional solo work effort after the divorce is
necessary to create the asset (see MI 2009 Appellate Court Skelly v.
Skelly, which directs effort to simply retain an asset instead of create
it is enough to cause non-division). Even so, USFSPA clearly says the
normal after age-60 retirement can be considered a marrital asset.
What's the difference? The difference is huge. A military retirement is
known as a possibility - indeed a recruitment tool - from before the
first day of duty. If a marriage is started under these conditions, it
is reasonable to argue either way. However, if a marriage is both
started and ended without any possibility of payment before age 60,
then that lack of expectation delineates that the later earned and
accrued asset is not a marital asset.
If you want a more detailed explanation with examples, see the
Section titled "Proximate of
Events cause Division - a More Intellectual Explanation." If you want
to know how to pro-rate division for a marriage that spans the magic
date of January 28th, 2008, let me know. Basically payments before and
after age 60 are treated as two separate assets to divide.
The phrase "based on" and "but for" cause great confusion when used with military retirements because they are legally
"Based on", "but for", and "provided a basis for" concepts are
specifically critiqued in the Sullivan rebuttal
available in the references section below.
It's important to distinguish two issues. One is a potential
debate about how a marital asset is divided. The more important
issue is whether something is a marital asset in the first place.
If an enhanced promotion benefit was "actively earned" or "accrued" without
spousal contribution after the divorce, it is not a marital asset no
matter what it is "based on" or how it is calculated.
vague phrase "based on" usually means the more precise
phrase "calculated from" or "calculated using" -- both of which are
more useful because they have defined meaning. Intentionally
being vague is a goal only of someone trying to be inequitable.
"Calculated from" is insufficient to justify division. In fact,
the claim "military member's post-divorce benefit is calculated from
the ex-spouse's divisible points and therefore should be divided," is a
point of perspective. If true, it is equally true that "the
ex-spouse's benefit is calculated from the military member's
non-divisible points and therefore should not be divided."
The reciprocity of
calculation is done because that's how a military retirement is defined
in Federal law, but method of calculation does not assign ownership,
only participation in accruing the benefit does.
The phrase "based on" iobscures good judgment, and use of this word in military retirement divorce proceedings really
means one of only two things:
1) "Based on" could mean "Accrued during". Example: "The
payment increased based on additional duty done during the
In this case UFSPA law directs that retirement can be divided because
there is a comingling of dates (switching dates does not affect the
calculation). Duty dates causing early retirement duty are
demonstrably NOT comingled with the normal retirement duty dates
because switching dates across the 1/28/2008 boundary does change
retirement value, which contradicts the definition of comingled.
2) "Based on" could mean, "Derived from" or "Calculated from".
Example, "Ex-spouse wrote a book based on being married to the other
person." Book earnings are not divided even though it taps into and
uses time of marriage. Example, "DFAS Hypothetical division method is
based on Cost Of Living Adjustments (COLA)." Nothing about COLA is
shared or divided just because it's in the calculation.
These two meanings create HUGE differences when dividing military
benefit. It's to the military member's benefit to be clear. It's to
the ex-spouse's benefit to be vague because without distinction, more
of #2 situations can be drawn into #1. In either case, to
~intentionally~ be vague dishonors the intent of our Nation's
Proximate of Events cause Division - a More Intellectual Explanation
The January 2008 early retirement law allows Reserve military
to increase value of retirement by earning earlier additional payments,
not more payment each month. The extra value is in how MANY
are made, not how MUCH each payment is.
Another way of thinking about this issue is to consider the proximate
cause of early retirement value increase. When the points were earned during a
marriage, both parties participated. Latent value doesn't
exist and has no value until the military member finishes
a career without the marriage partnership and actually applies for
retirement. The Supreme Court ruled that latent military
cannot be divided. However, in the specific and narrow case of
military members with comingled duty dates, UFSPA legislation undid the applicability to military
retirements by allowing that courts may (not must) divide latent value
if it is
specifically a military retirement. However, at least in
Michigan, one could argue that civilian latent benefits
remain non-divisible per the 2009 Skelly v. Skelly Appellate course
mentioned above, which dealt with a latent civilian retention bonus that was ordered not divisible.
The time sequence of events causing divisibility of military latent benefits in the eyes of UFSPA is:
First, laws since the early 20th century define how much monthly retirement payment is made
Then, retirement points are accrued during a marriage, followed by divorce
Then, latent retirement payments are vested or converted into earned retirement
Because the marriage accrual of value in the 2nd step is proximate to
the developed retirement in the 3rd step, developed value becomes
However, with early retirement payments, the
proximate relationship is reversed:
First, retirement points are accrued during a marriage, followed by divorce
Then, new laws in Jan 2008 create additional payments but do not change the amount of payments
Then, additional military retirement points are earned that make the
payment per month go up, plus additional duty points (alone) create
additional payment months.
The marriage accrual of value is
NOT proximate to the developed retirement - rather the new law in the
2nd step is proximate to the developed value in the 3rd step - so
developed value is not divisible. Latency did not exist during the marriage. so USFSPA does not apply. The Supreme Court ruling stands.
In the first case, the law and the earning of credit span *across* the
marriage. In the second case, the marriage was terminated and THEN a
new law was created and a benefit was earned under the new law. The
marriage is NOT proximate to earning the benefit and therefore the
benefit is not divisible. It is very rare that new laws reach
retroactively and change history. For example, UFSPA laws did not attempt to
do this. In a similar way the January 2008 law should not reach retroactively into the marriage. Graphically,
When in this order: ( Law - Marriage - Accrual ) ---> Division
When in this order: Marriage - ( Law - Accrual )---> No Division
If there is any doubt to this conclusion, consider contract law as
analogy. If the marriage is inserted into the "retirement
contract" between the Federal government to a military member, then the
in that contract. This is shown in parantheses above. However, the early retirement law is a new
"retirement contract" meant to motivate future duty of Reservists -
causing them to do more duty for early retirement pay. The new
contract comes into existence only after the marriage is history.
The new contract is exclusive of marriage, and does not change or damage or modify the
divisible retirement in any way, and so the ex-spouse has no
third-party interest or claim into the additional value, regardless of
how it is calculated.
In summary, although early retirement monthly amount is calculated
using the same method to yield a fraction or percentage, the
calculation process is not relevant to determine divisibility.
payments earned and accrued outside of a marriage are not
divisible because marriage is chronologically outside the scope
of the retention bonus contract.
Practical Legal Implementation
For those members who were married and did military duty before 1/28/08
and have earned or may in the future
retirement enhancement by earning points after 1/28/08, a decision must
be made as to whether payments before age 60 are a divisible asset
or an un-divisible asset. The answer to this question would
depend on the period of marriage, divided into 3 possibilities:
1. If the marriage
was entirely before 1/28/08,
the before age-60 retirement payments were earned only after the
marriage, so the benefit would be retained 100% by the military
member. No matter what formula is used to determine a division percentage, the division order
must specify that no division occurs until member age-60.
Caution: If the division order is silent on this issue,
all retirement payments will be incorrectly divided by DFAS, so the
order must state that payment division will begin only upon the
military member reaching age 60. If DFAS will not change their
payment destinations at age 60, then the division order must state that
the ex-spouse return payments to the military member each month before age 60.
2. If the marriage was entirely after 1/28/08, then
the before age-60 monthly payments are divided same as after age-60
monthly payments. Correct division will occur by not mentioning
this issue at all in the order (DFAS will divide all payments the same).
3. If the marriage
monthly payments need to be prorated with a different coverture fraction than done with the age-60 and after payments. The
numbers for the coverture fractions for the two retirements will be
different, so two
formula paragraphs must be written for DFAS to use. The formula
paragraphs should reflect Area Method
(also called "DCV") to include
corrections for possible future military rank promotions.
One other "got'cha" is worth paying attention to. Military
division orders may be generated using templates published by Mark
Sullivan. One of the cut-n-paste phrases is vague enough to cause
trouble. Under the 10-year rule, an ex-spouse can get payment
direct from DFAS instead of passing through the retired military
member. Cut-n-paste paragraph 3(b) in the 2014 guide offers the
phrase, "Plaintiff shall receive payment at the same time as Defendant"
(inappropriately,this assumes the plaintiff is the ex-spouse).
Mr. Sullivan introduces paragraph 3, saying, "This section addresses
whether military retired pay may be paid directly by DFAS to the
non-service member spouse."
However, a 29 Mar 2016 letter from DFAS quoted this phrase and said therefore
early retirement pay would be divided. They misappropriated the
sentence to a new and unintended purpose. Their interpretation is
wrong for 2 reasons: 1) when the phrase was written in the guide, early
Reserve retirement didn't even exist as a concept so it must be about
something else, and 2) the author of the guide clearly states it's for
a different purpose. DFAS is known for their bureacratic quagmire and
mistakes and you don't want to get tangled in their confusion (Virginia Pilot, Stars & Stripes, Outside the Beltway, Reuters). Be clear in your division order about retirement pay before age 60.
To pursue equity, family law courts must
recognize the new Reserve "early" military retirement as a separate and
distinct entity. It may or may not be a divisible marriage
asset, or may be a partial marital asset. If this issue is not addressed in the original
division order, every Reserve military member who earns a "before age
60 benefit" (possibly long after the divorce) will be back in court
asking the court to address this issue in compliance with the original
intent of the division order. This is consistent
with the 2001 DoD USFSPA report to congress which says:
ex-spouse a portion of
post-marriage benefit] of military retired pay is
inconsistent with the treatment of other marital assets in divorce
proceedings—only those assets that exist at the time of divorce or
separation are subject to division. Assets that are [actively] earned
divorce are the sole property of the party who earned them."
- DFAS "Guidance on Dividing Military Retired
Pay", March 2014, 25 pdf pages with bad formatting, 121 KB pdf. (DFAS.mil, increa copy).
- Older copy April 2012, 20 pgs, 119
KB pdf. (DFAS.mil,
- Older copy "Attorney
Instructions - Dividing
Military Retired Pay", April 2001,
19 pgs, 74kb pdf. (DFAS.mil,
- DoD Report to Committee on Armed Services of the US Senate and
House of Representatives, 1998, 84 pgs, 279 KB pdf. (Defense.gov,
Instructions - Division of Reserve and Active Duty Military
- Division of Blog post Dual
Coverture is better than DFAS Hypothetical Method,
- "Reservists may qualify for early retired pay," www.afrc.af.mil
news release (increa copy),
24 Feb 2009.
originally appeared on the Increa.com
shell of this expanded document was created
under the Linux
desktop. Content was edited using Kompozer.
(c) 2016 by Brian Mork.